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Issues:
- Petitions filed seeking amalgamation of two companies under sections of the Companies Act, 1956. - Approval of the scheme of amalgamation. - Consideration of public interest and benefits of amalgamation. - Dissolution of the transferor-company without winding up process. Analysis: The judgment by the High Court of Delhi, delivered by Justice Bhandari, addressed the petitions filed under sections 391(2), 392, 393, and 394 of the Companies Act, 1956, seeking the amalgamation of two companies. The scheme proposed that all assets, liabilities, workmen, and employees of the transferor-company would be taken over by the transferee-company. It was highlighted that both companies were engaged in the same business, and the amalgamation would lead to integration, substantial cost savings, and a broader product base for the transferor-company. The service conditions of the employees post-transfer were to be maintained or improved. The court noted that both companies were subsidiaries of the same parent company, indicating a close relationship in management and operations. The senior advocate for the applicant emphasized that the two companies were divisions of the same management, sharing similar objectives in manufacturing and selling compressors and related products. The proposed amalgamation was seen as a strategic move to enhance operational stability, resource utilization, and achieve economies of scale for growth and diversification. It was argued that the combined financial resources and goodwill would strengthen the capital base and creditworthiness of the amalgamated entity, benefiting shareholders and stakeholders. The court considered reports from the official liquidator and the Regional Director, which supported the scheme as non-prejudicial to public interest, shareholders, and creditors, with provisions for the welfare of workmen. Referring to a judgment by the Andhra Pradesh High Court, the judge found that the proposed amalgamation aligned with the objectives of efficient business operations and did not pose any public interest concerns, especially given the companies' shared group affiliation. Consequently, the court approved the scheme of amalgamation, making it binding on all parties involved. The transferor-company was directed to be dissolved without undergoing a winding-up process, with specific timelines set for filing necessary documents and completing formalities. The judgment concluded by disposing of both petitions in line with the approved scheme of amalgamation, ensuring compliance with legal procedures and safeguarding the interests of stakeholders.
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